Belo reported a total revenue decline of 6.4% for the third quarter, compared to the same quarter a year ago. Belo President/CEO Dunia Shive cited “worsening economic conditions” and the impact of the fall’s hurricanes in key markets as culprits in the decline.
Total spot revenue was down 8.8% at Belo for the quarter; automotive advertising slipped a whopping 26%.
"Third quarter results were also negatively impacted by Hurricanes Ike and Gustav, which hit our Houston and New Orleans markets, respectively,” said Shive. “The financial impact related to the hurricanes totaled approximately $3.5 million, including an estimated $2.6 million in advertising revenue displaced due to continuous news coverage and lower audience levels stemming from lengthy power outages. Excluding the effects of the hurricanes and spin-off related costs from the third quarter of 2007, the Company's earnings from operations decreased just 3.4 percent, largely due to expense reductions. In addition, the Company reduced its debt by $42 million using cash generated from operations in the third quarter."
Belo reported Olympics revenue of $9.7 million and political revenue of $11.7 million for the quarter. Advertising revenue on the Belo Websites grew 18% in the quarter to $7.9 million, or 4.6% of Belo’s total revenue. Retransmission consent revenue tallied $8.4 million in the third quarter, a 41% boost over the same quarter in 2007. Belo forecasts $31 million in retransmission revenue for the year.
Shive expects another dim report in the fourth quarter. “The lack of consumer confidence and continued weak economic indicators point to a prolonged soft advertising environment. Current pacing trends indicate about an 8% decline in total revenue in the fourth quarter,” she said. “We expect political revenues to finish around $36 million in the fourth quarter of 2008 and $56 million for the year.
"Because of these extraordinary market conditions, we will continue to focus on cost reduction and debt pay-down for the foreseeable future. We expect year-over-year fourth quarter station expense declines similar to what we experienced in the second and third quarters of this year.”
Belo owns 20 stations nationwide.